Council Debates Assessment Process
Alders unhappy. Assessor gets grilled about home value hikes in certain neighborhoods.
A Milwaukee Common Council committee spent four hours Monday debating the ins and outs of the city’s assessment practices, and what to do about them.
Residential property assessments, which under state guidance are supposed to reflect pre-pandemic values on January 1st, are up an average 11.95 percent across the city. That isn’t sitting well with many city residents, including a number of Common Council members.
Property owners have until May 18th to file an appeal, but a proposal from three council members asks the citizen-led Board of Review to extend that deadline by 30 days. Another proposal would freeze assessments entirely for a year, locking in 2019 values until 2021.
“We wanted to have a public discussion of the assessments, where we are and how we got here,” said Judiciary and Legislation Committee Chair Alderman Ashanti Hamilton. The committee chair is backing the delay alongside Milele A. Coggs and Marina Dimitrijevic.
Ald. Mark Borkowski, who introduced the proposal to freeze the assessments, isn’t happy with how things are playing out. “Let me preface my remarks by saying how disappointed and discouraged I am with some of our city attorneys and the Assessor’s Office,” said the southside alderman at the start of the meeting. “There was no trying to help, this whole rigidity, very discouraging.” He said the delay wouldn’t be enough, comparing it a “putting a bandaid on a harpoon wound.”
He doubled down two hours in to the debate, saying he hadn’t changed his mind at all and called the latest effort “gouging.”
“I don’t know how a home in my district went up $185,000. Who wasn’t doing their job the year before?” asked Borkowski.
But Ald. Scott Spiker sees things differently. “If it’s an attempt to raise more revenue, it’s completely wrong-headed, and I’m not accusing the assessor of that, but those that do are,” said the alderman. He noted that the property tax levy is set by the council in the budget and divided up based on property values. He compared the assessment process to figuring out how much a group of friends should each pay when they go out to eat by basing it on how much they ate.
Under state law, the tax levy can only be increased by the value of new construction. In short, any changes in value for existing homes don’t allow the city to increase the tax levy. As Spiker notes, the increases in value would only change the proportion of taxes paid by a particular neighborhood.
Under state law, properties are assessed based on a legal definition of “market value.” That is primarily accomplished by comparing home styles and locations to sales data. The city uses software from Patriot Properties to accomplish the task.
Since 2002, the assessment process has been carried out annually.
“Annual assessments… is the best way to keep the property tax fair and that’s the goal of the Assessor’s Office,” said Miner. He said the move to annual assessments was based on four principals: fairness, equity, property values changing at different rates in different areas and disparities compounding over time if not adjusted often.
It’s the third factor, that some areas are more in demand than others, that he believes is causing an issue now. “That’s exactly what happened this year and I think that’s what’s causing some of the calls to alders,” said Miner. Assessments are up most notably on the west side of Bay View and the Harambee neighborhood.
“The guidance from the state has been COVID-19 does not impact January 1 assessments. It’s our requirement to implement that, it’s certainly not a popular decision,” he said.
Coggs, who represents Harambee and a portion of Riverwest, asked if the Assessor’s Office was looking at data on home sales to owner-occupants versus rental companies and other figures that could be influencing things.
Miner said he was told anecdotally by the assessor assigned to the area what is driving the Harambee increase. “These are often times thirty-somethings that can’t afford Riverwest but they can get the same house, very close by, for a lot less in price,” he said. But, he noted that the Assessor’s Office doesn’t keep a database of that information.
Peter Bronek, the city’s chief assessor, presented the council with charts and graphs on how the department evaluates assessments versus sales data. He showed a chart of 2019 sales prices versus 2019 assessments, showing that sales of various building styles (cottages, duplexes, tudors, townhouses, ranch homes, etc, etc) outpaced assessments. He then showed a second chart with the 2020 assessments compared to 2019 sales showing the values near equilibrium.
“Those two graphs are a terrible way to compare the data,” said Ald. Nik Kovac. “What we need to see is 2019 sales data versus 2018 assessments.”
Kovac also took issue with the use of property types. “It’s neighborhood, it’s size,” he said of what matters. The alderman said he was seeing irregular values in his district, including a condominium building where all units are effectively the same, but being valued differently.
“The categories we using are typical for the industry,” said Miner. He said a report on the effectiveness of the department would be available by the end of the month.
“You’ve heard my criticism that you’ve over characterized. I think you’ve fit your data with too many variables,” said Kovac, a self-described amateur when it comes to real estate, but the recipient of a math degree from Harvard.
He asked for a map of all the properties that increased by more than 25 percent. “I am trying to help you to figure out where it went wrong.”
Ald. Michael Murphy asked why individuals have to file an appeal on paper. “It was designed just for this purpose so we would not lose anybody’s form,” said Miner, noting that the process can be started online. Individuals requesting the forms to appeal are logged by the department.
But Murphy said doing the entire process online would also ensure nothing is lost. “Going forward we should recognize, these are customers, this is the public that we serve, why do we want to make it more difficult?” asked the alderman.
Coggs seconded Murphy’s reasoning and said she would introduce a file requiring the office to accept online appeals. “I think that’s one thing we can have that won’t be an issue in the future,” said the alderwoman.
Murphy asked if the Assessor’s Office had the staffing it needed after Miner noted that the assessment team has fallen in size from 45 in 2002 to 26 today.
“It’s been a struggle for us to continue to do annual reassessments with the staff we have,” said Miner.
“We probably would have had a lot less of those if we had more resources,” Miner said of the outliers brought up by council members.
How would the council’s pending files to delay the appeals process or freeze assessments work? That’s unclear. Deputy city attorney Mary Schanning suggested early in the meeting that a full discussion would need to be held in closed session. Miner indicated that proposals may conflict with state law.
“You shouldn’t have to need to go into closed session to say certain things,” said Hamilton, who kept the meeting public for almost three hours. If a move to freeze residential assessments but not commercial assessments would violate the Uniformity Clause in the Wisconsin Consitution, Hamilton added, that could be said in public session.
But ultimately the body spent an hour in closed session and then emerged to quickly hold Borkowski’s move to freeze assessments.
“There was much discussion in closed session pretty much what was discussed in open session,” said Hamilton.
The delay proposal is not something the council can pass and is a suggestion to the Board of Review.
Regardless of what the council decides, thousands of people are already moving to appeal. Over 3,000 property owners have requested objection forms, eclipsing the 2019 total of 2,085 with a week still to go before the May 18th deadline.
The recent high was approximately 6,000 appeals in 2012 said Miner, with 7,500 appeals in 2002 when the annual assessment process started.
Miner said most of the cases will never make it to the Board of Review for a final decision before going to court. “Generally it’s under 100,” he said. Instead the Assessor’s Office meets with the property owner and agrees to a change based on the data.
Individuals wishing to appeal can go to the Assessor’s Office website to begin the process. An assessor does not need to enter the home to complete the appeal process.
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Related Legislation: File 200030